Ingram Micro EMEA's bold fuel move to lead the way

The decision by Ingram Micro to become the first distributor to charge resellers for freight on all orders in an attempt to recoup the rapidly rising cost of fuel across Europe has led others in the industry to admit they are either close to following suit.

During the last twelve months the spectre of price hikes for logistics seemed inevitable as the cost of fuel soared and today the world's biggest distributor confirmed it has finally grasped the nettle.

In a statement Ingram said the IT distribution sector across Europe had shouldered substantial freight costs on behalf of resellers and their customers.

"Ingram Micro EMEA will tackle the difficult issues of freight costs to ensure our future success and sustainability," said Jay Forbes, EVP and president at Ingram Micro EMEA.

The rapidly rising cost of shipping meant action was required now added Forbes, "Ingram Micro EMEA will implement policies and processes to recover the full cost of shipping products to our customers."

The move is unlikely to go down well with resellers who will need to pass on the charges to customers who are used to free or minimal carrier costs, a situation that Forbes acknowledges.

"We understand this decision will be challenging for our customers, and will work with them to make the transition as smooth as possible," he added.

Graeme Watt, president of worldwide distribution at Bell Micro confirmed it was also going to raise freight charges early August but admitted there was some nervousness among IT distributors about being the first - a bold step taken by Ingram.

"We are planning to do the same thing, I don't see what choice distribution has got, fuel prices have rocketed," he told Microscope, adding he fully expected resellers to tie incremental costs to fuel and freight into the charges.

It is likely the prices rises will filter through the supply chain as Phil Doye, managing director at Kelway, said the resellers could not afford to absorb increases. "Will resellers pass on the costs of carriage? They will have to charge more for kit," he said.

Doss Etter, director of external affairs at the Freight Transport Association said diesel prices had soared 40 per cent in the last year as a result of rising oil prices - which currently stands at $145 compared to $90 in January.

"It is inevitable that the extra costs will be captured by an increased price," he said, adding transport costs constituted up to two per cent of the overall cost of high value items including IT.

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